In Gun Trusts, a Legal Loophole for Restricted Firearms

By ERICA GOODE

February 25, 2013

A growing number of shooting enthusiasts are creating legal trusts to acquire machine guns, silencers or other items whose sale is restricted by federal law — a mechanism that bypasses the need to obtain law enforcement approval or even undergo criminal background checks.

The trusts, called gun trusts, are intended to allow the owners of the firearms to share them legally with family members and to pass them down responsibly. They have gained in popularity, gun owners say, in part because they may offer protection from future legislation intended to prohibit the possession or sale of the firearms.

But because of a loophole in federal regulations, buying restricted firearms through a trust also exempts the trust’s members from requirements that apply to individual buyers, including being fingerprinted, obtaining the approval of a chief local law enforcement officer and undergoing a background check.

Lawyers who handle the trusts and gun owners who have used them say that a majority of customers who buy restricted firearms through trusts do not do so to avoid such requirements. And most gun dealers continue to require background checks for the representative of the trust who picks up the firearm. But not all do.

Christopher J. Dorner, the former Los Angeles police officer who embarked on a weeklong assault on law enforcement officers this month that ended with his death on Feb. 12, said in a rambling 11,000-word manifesto that he had used a gun trust to buy silencers and a short-barreled rifle from a gun store in Nevada without a background check.

Referring to a computer program available from the personal finance software company Quicken, Mr. Dorner wrote, “I was able to use a trust account that I created on quicken will maker and a $10 notary charge at a mailbox etc. to obtain them legally.” Mr. Dorner was not a felon and probably would have passed a background check had he received one.

Mike Campbell, a spokesman for the Bureau of Alcohol, Tobacco, Firearms and Explosives, which enforces firearms regulations, said that applications filed with the A.T.F. for transfers of restricted firearms to trusts or corporations have more than doubled in the last four years, to more than 39,000 in 2012 from about 15,000 in 2008. He said the increase was largely attributable to the growth in the number of trusts.

Mr. Campbell confirmed that under current regulations, background checks were not required for the buying of restricted firearms through trusts. The agency, he added, was aware of the loophole and was reviewing changes to close it.

Lawyers who prepare gun trusts said requests for the documents had been increasing in recent months as proposals for gun legislation proliferated in state legislatures and on Capitol Hill. They said some gun owners were even creating trusts for nonrestricted firearms like semiautomatic rifles and pistols, hoping to protect them against the specter of future legislation.

The cost of setting up a trust can vary from a small amount for an online form to $100 to $2,500 in lawyers’ fees, depending on location and the type of trust.

The sale and possession of silencers, fully automatic guns manufactured before 1986 and other firearms and accessories that fall under the 1934 National Firearms Act are legal in many states. But the A.T.F. keeps a registry of the firearms and must approve their sale, a process that can take several months, and the buyer must pay a $200 tax.

J. W. Hagan, a computer administrator in Jacksonville, Fla., said he created a trust to buy silencers, which have become popular for target shooting and hunting and can be owned legally in a growing number of states. He said the trust would ensure that if he died, his firearms would remain legal. The trust would also allow his fiancée to use the silencers once the couple married.

“If I didn’t have a trust, she wouldn’t even be able to have the password for my safe,” he said.

David Goldman, an estate lawyer in Jacksonville who, along with another lawyer in Florida, Bob J. Howell, has helped popularize the use of gun trusts six years ago, said most dealers carried out background checks for restricted firearms. He called the notion that criminals might use the trusts to buy the firearms through a dealer “ridiculous.”

“Illegal versions of these items are not only cheaper,” he said, “but you can obtain them six months faster and you don’t have to form a trust, which could be $500 or $1,000 depending on the level, and you don’t have to tell the A.T.F. about it.”

Mr. Goldman, who has prepared several thousand gun trusts and teaches courses on their use, said the trusts have many benefits, like ensuring that firearms were passed on responsibly when an owner dies, keeping them from falling into the wrong hands in a difficult divorce or helping to negotiate moves to other states that might have different gun laws.

“There was never a proper way of dealing with firearms with estate planning and whether beneficiaries were appropriate to receive them,” Mr. Goldman said.

Gun owners also turn to trusts, other lawyers who handle them said, because in many jurisdictions, law enforcement officials refuse to sign off on the purchase of restricted firearms, making it difficult or impossible for enthusiasts to buy them as individuals.

Brian Reynolds, a lawyer in Denver, said he had prepared several gun trusts, mostly for people who wanted to buy silencers for long-range target shooting. But in many parts of Colorado, he said, sheriffs and police chiefs will not approve such purchases. “By having a trust, you bypass the need to get that authorization,” Mr. Reynolds said.

However, Jim Bueermann, the president of the Police Foundation, a research organization in Washington, said, “My guess is that the majority of police chiefs would agree that there is a reason why, as a general rule, people are prohibited from owning silencers, machine guns and what we would call sawed-off rifles or shotguns.”

Mr. Bueermann said that he was especially concerned about the loophole in A.T.F. regulations that made it possible to buy restricted firearms without a background check and that he thought most Americans would find this shocking. The A.T.F.'s regulations, in fact, exempt trusts from background checks, as noted in the Federal Firearms Regulations Reference Guide, known as the White Book, and on the forms for gun sales that dealers file to the agency. (In one publication, its handbook on the National Firearms Act, the agency does say that the trust representative who picks up a restricted firearm at a dealer must have a background check, but that deviates from what the regulations require, the A.T.F. confirmed.)

Many dealers conduct checks anyway. But others take the government at its word. One dealer, for example, said he did not think he had to run background checks for sales to trusts because Form 4473, the record of the transaction filled out by the dealer and the customer and sent to the A.T.F., specifically lists trust transfers of restricted firearms as an exception to the requirement for background checks.

Bob Irwin, who owns the Gun Store in Las Vegas, said his store always performed background checks for firearm purchases involving trusts — the store has handled three so far this year — but he was aware that some dealers did not.

The gaps in the law that allow such lapses, he said, are “astronomically stupid.”

“That really is a loophole,” Mr. Irwin said. “I can certainly see how a felon could wind his way through it and end up with machine guns.”